The government has closed the Plug-in Car Grant scheme, as sales of electric cars continue to accelerate following 2020’s announcement that it will end the sale of all new petrol- and diesel-powered cars in 2030. The government says the scheme has been successful in kickstarting the sales of EVs, with more than 500,000 supported by the grant.
The scheme, which offered a £1,500 discount towards the purchase price of all electric cars costing less than £32,000 was gradually being scaled back anyway – but the announcement took the industry by surprise. Sales of EVs are growing rapidly, breaking records on a month-by-month basis, with just 24 models on sale being offered with a Plug-in Car Grant.
All existing applications for the grant will continue to be honoured and where a car has been sold in the two working days before the announcement, but an application for the grant from dealerships has not yet been made, the sale will also still qualify for the grant.
The grant was introduced as a temporary measure and successive reductions in the size of the grant, and the number of models it covers, helped an increasing number of buyers into electric cars. The government is now refocusing its funding into other areas. £300 million in grant funding will now be offered to boost sales of plug-in taxis, motorcycles, vans and trucks and wheelchair accessible vehicles. The good news therefore, is that the Plug-in Van Grant remains in place, with the government having committed to two years of support back in March 2022.
Funding emphasis now moved to charging network
Government funding for the public chargepoint network will be increased, with the emphasis being placed on the ownership of electric vehicles. Electric car drivers will continue to benefit from generous incentives including zero road tax and favourable company car tax rates, which can save drivers over £2,000 a year.
Transport Minister Trudy Harrison said: ‘Since 2020, the government has committed £2.5 billion to plug-in vehicle grants, infrastructure and the wider transition to electric vehicles in the UK. The industry is further boosting the switch to greener vehicles by expanding its range of more affordable zero emission cars.’
The news hasn’t been universally well received. Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders (SMMT) said: ‘The decision to scrap the Plug-in Car grant sends the wrong message to motorists and to an industry which remains committed to Government’s net zero ambition. While we welcome government’s continued support for new electric van, taxi and adapted vehicle buyers, we are now the only major European market to have zero upfront purchase incentives for EV car buyers yet the most ambitious plans for uptake.
‘With the sector not yet in recovery, and all manufacturers about to be mandated to sell significantly more EVs than current demand indicates, this decision comes at the worst possible time. If we are to have any chance of hitting targets, government must use these savings and compel massive investment in the charging network, at rapid pace and at a scale beyond anything so far announced.’
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